WHAT IS One Person Company?


The concept of One Person Company in India was introduced through the Companies Act, 2013 to support entrepreneurs who on their own are capable of starting a venture by allowing them to create a single person economic entity. One of the biggest advantages of a One Person Company (OPC) is that there can be only one member in a OPC, while a minimum of two members are required for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership (LLP). Similar to a Company, a One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder, while having continuity of business and being easy to incorporate.



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One Person Company Benefits


1. Limited Liability Protection To Directors and Shareholder

All unfortunate events in business are not always under an entrepreneur’s control; hence it is important to secure the personal assets of the owner, if the business lands up in crises.

While doing business as a proprietorship firm, the personal assets of the proprietor can be at risk in the event of failure, but this is not the case for a One Person Private Limited Company, as the shareholder liability is limited to his shareholding. This means any loss or debts which is purely of business nature will not impact, personal savings or wealth of an entrepreneur.

2. Legal Status And Social Recognition For Your Business 

One Person Company is a Private Limited Structure, this is the most popular business structure in the world. Gives suppliers and customers a sense of confidence in business. Large organizations prefer to deal with private limited companies instead of proprietorship firms.

Pvt. Ltd. business structure enjoys corporate status in society which helps the entrepreneur to attract quality workforce and helps to retain them by giving corporate designations, like directorship. These designations cannot be used by proprietorship firms.

3. Complete Control Of The Company With The Single Owner 

This leads to fast decision making and execution. Yet he/she can appoint as many as 15 directors in the OPC for administrative functions, without giving any share to them.

4. Helps for Testing of business model and enables Funding

The OPC business helps Startup Entrepreneurs to easily test the business model, a prototype and upon building a marketable product approach Angel investors, Venture capitalists for funding and easily convert into multi shareholder Private Limited company.

5. Easy to Get Loan from Banks

Banking and financial institutions prefer to lend money to the company rather than proprietary firms. In most of the situations Banks insist the entrepreneurs to convert their firm into a Private Limited company before sanctioning funds. So it is better to register your startup as a One Person private limited rather than proprietary firm.







One Person Company is a type of Private Limited Company, which allows entry into corporate world by the single entrepreneur by holding 100% share in a Company. OPC by nature is a Private Limited Company and all provisions applicable to Private Company are applicable to OPC unless exempted or expressly provided. It is a best suitable organisation for the promoter who is not willing to get any interruption of any other Partner and do not wish to dilute the share of ownership or control over company.

To register One Person Company (OPC) in India, the DSC (Digital Signature Certificate) and DIN (Director Identification Number) of all the directors and Subscriber to MOA (owner) along with the Nominee is to be acquired. The Registered Office shall also be in existence for online Private Limited Company Registration.

Digital Signature Certificate is provided in a token form and issued by Certified Authorities. Any form filed to register an OPC in India shall be submitted after affixing the DSC of an Applicant. Also, the directors will require DSC for DIN application and the subscribers to MOA along with the Nominee shall possess DSC for submitting e-forms.

Director Identification Number is a unique number assigned by the Ministry of Corporate Affairs (MCA) to Individuals on application made, which allows any individual to be Director in any Company or Designated Partner in LLP and Nominee at the One Person Company in India.

One can incorporate a One Person Company with any amount of Paid-up Capital. However, fee must be paid to the Government for issuing a minimum of shares worth Rs. 1 lakh [Authorized Share Capital] during registration of OPC in India. Nevertheless, the paid-up capital shall not exceed Rupees 50 Lakh as it attracts mandatory conversion into Private or Public Company.

Authorised capital shows maximum amount of capital, a company can raise by way of issue of shares at present or in future whereas the Paid-up Capital refers to the actual amount raised by and introduced in the Limited Company i.e. paid by shareholders to the Limited Company on issuance of shares. A company can be incorporated by any amount of Paid-up capital, which can be less that authorized capital but not exceeding such.

In order to register OPC in India, as the name suggest, there is only one owner i.e. Shareholder in the One Person Company. Further, one nominee is to be appointed with his consent. With regards to Director, appointment of minimum 1 Director is also prescribed. Here, the Shareholder and the Director can be the same person.

The requirement of appointment of nominee is prescribed in order to retrain the character of Perpetual Existence i.e. Uninterrupted Existence of the One Person Company. A nominee shall be individual only and is to be appointed while incorporation of the OPC. In event of death or incapacity to contract of existing member, the nominee will become member of the one person company.

The member/nominee shall be an individual being Resident of India. Further, he or she shall not be minor or incompetent to contract. In addition to same, the Nominee shall hold DIN (as explained above) and give his consent to company for appointment as nominee.

There are no limitations in terms of citizenship or residency to be a director. But the person should be 18 or above 18 years of age i.e. not a minor. Also, the proposed director shall have DIN (as explained above) and not be disqualified to be appointed as director in Limited Company as per the provisions of Indian Companies Act, 2013.

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